In the La La Land of Detroit governance, a grateful President Barack Obama may be about to rescue elected officials from the need to make hard choices with a huge federal bailout.

Or at least that's what City Council member JoAnn Watson suggested before Tuesday's City Council meeting.

The way Watson sees it, Obama owes Detroit for the big turnout that aided his re-election. She's hallucinating, of course, but her fantasy begs the crucial question in the city right now: Which will come first, a municipal bankruptcy filing or the end of delusional governance?

The groundwork is actually being laid for substantial improvement in Detroit government. The Legislature is close to sending bills to the governor that would create a regional transit authority and a public lighting authority. Both represent inventive problem-solving -- finding ways to provide more stable, efficient service delivery and to fund it responsibly.

Both efforts have taken way too long, but the city's Lansing delegation, as well as Mayor Dave Bing and the rest of the Legislature, deserve plenty of credit for being so close to getting them done. Nearly 40% of the city's streetlights don't work, and you can wait hours for a bus to school or work. Fixing either would be a huge step.

That's to say nothing of the momentum spurred by private and nonprofit capital in the city. Quicken Loans owner Dan Gilbert is buying -- and redeveloping -- neglected downtown skyscrapers at a manic pace. The Ilitch family just announced intentions to build a $650-million sports/commercial/residential complex somewhere around downtown or Midtown.

But locally, city government remains stuck in an alternate universe of denial and daydream.

A federal bailout? Watson wouldn't want one if Washington were to offer.

Bailouts are about restructuring -- think what GM and Chrysler, or the banks, had to do to get theirs. And that's the very thing Watson and too many of her colleagues have been resisting.

If the city were to get federal help for its crushing debt or other fiscal imbalances, the minimum expectation would be that the circumstances that produced the insolvencies would be corrected, going forward. It's hard to name much in the way of that kind of reform that has been achieved.

Not that it isn't clear what needs to be done. The state and the city have a consent agreement that lays out a clear path toward better fiscal management, but council members (including some who actually voted for the agreement in the first place) keep hemming and hawing over minor sticking points.

The latest squabble is over what law firm Bing can hire to counsel him on the restructuring -- a snag that threatens the release of $10 million in state-backed bonds the city needs just to make payroll.

The incongruity -- fighting over lawyers rather than confronting the factors that have you borrowing money to make payroll -- would be comical if it weren't so tragic. The state, too, bears some responsibility for focusing on little things at the expense of bigger, transformative changes.

Bing implored the council to act Tuesday on yet another fiscal time bomb -- a crisis involving pension contribution shortfalls -- but members kicked a decision to today. Bing's administration now believes that furloughs and cuts will be needed to get through the fiscal year even if state money comes through.

The city still spends more than it takes in, and it owes more than its worth -- 33 times more, according to one audit.

It's almost as if council members really believe someone will swoop in and save them.

Maybe they do believe in Santa Claus -- but for the rest of us, it may be time to pray to a higher power for government sanity.

Stephen Henderson is editorial page editor for the Free Press and the host of "American Black Journal," which airs 1 p.m. Sundays on Detroit Public Television. Follow Henderson on Twitter@ShendersonFreep, or contact him at shenderson600@freepress.com, or 313-222-6659.